Pound Sterling (GBP) is seeing strong purchasing demand as investors assess the chances of a UK recession.
The Pound Sterling (GBP) is seeing strong purchasing demand as investors assess the chances of a UK recession. The GBPUSD pair recovers significantly as market players acknowledge. That the British economy has no choice but to function with higher interest rates set by the Bank of England (BoE). Owing to a high-inflation environment. The Pound Sterling’s gain was partly fueled by a correction in the US Dollar.
Following a 13-year contract, The UK’s Manufacturing PMI is projected to fall for the second month in a row. As the Bank of England is adamant about maintaining interest rates high long enough for inflation to fall below 2%.
Daily Digest Market Movers: Pound Sterling benefits from the US Dollar’s slow decline.
The pound sterling extends its rebound to about 1.2220. Aided by a moderate correction in the US dollar as the risk aversion theme loses tenacity.
The UK economy is vulnerable to a recession because labor market conditions have cooled as firms have become worried about demand.
Higher taxes are threatening Britain’s industrial and service industries. The Bank of England (BoE) sets interest rates. Following a poor Manufacturing PMI. The Services PMI also entered a contractionary phase as households struggled to cope with increasing inflation.
The Pound Sterling’s gain was also fueled by increased interest in real estate. As homebuyers believe the Bank of England has stopped raising interest rates. Zoopla, the UK’s property website, reported a 12% increase in new house queries over the last four weeks.
According to the Lloyd Bank company Barometer. British company confidence decreased to 36% in September from 41% in August, an 18-month high.
Hann-Ju Ho, senior economist at Lloyds Bank Commercial Banking, highlighted. That the poll was done prior to the Bank of England’s decision to keep interest rates unchanged. , which should have bolstered employer confidence. He did, however, caution that the economic climate is still unpredictable, with inflation and interest rate pressures playing a role. The central bank’s recent move is expected to make firms feel more optimistic about the future.
National Statistics Office in the United Kingdom announced the final reading of real Gross Domestic.
Meanwhile, the National Statistics Office in the United Kingdom announced the final reading of real Gross Domestic Product (GDP) on Friday at 06:00 GMT. On a quarterly and yearly basis, real GDP remained unchanged at 0.2% and 0.6%, respectively.
The S&P Global Manufacturing PMI report for September will be closely watched by investors next week. For the 14th time in a row, manufacturing activity in the United Kingdom is predicted to decrease. A figure less than 50.0A threshold is seen as a reduction in economic activity. At 44.2, the economic data remains constant.
As the fourth quarter of 2023 begins, investors’ risk-taking ability increases, but upside threats to a global downturn persist.
US Dollar is trading down against a 10-month high ahead of the Federal Reserve’s (Fed).
The US Dollar is trading down against a 10-month high ahead of the Federal Reserve’s (Fed) preferred inflation indicator. According to forecasts, the monthly core Personal Consumption Expenditure (PCE) price index would rise at a constant rate of 0.2%. The annualized figure is expected to slow to 3.9% from 4.2% in July.
Meanwhile, the US jobs market is strong, as weekly jobless claims for the week ending September 22 were higher than expected. According to the US Department of Labor, persons filing their first jobless claimsThe previous week’s release climbed by 2K to 204K, however it remained lower than forecasts of 215K.
